Q: What the the correct interpretation of Section 139 of negotiable instrument act, 1881 ?

Ans: The Correct view : The intent of legislature behind S.139 is 

1. That the cheque is issued to clear any debt or liability, in whole or in part. 

2. This presumption is given to Holder only.

A  cheque can be issued by the drawer A to the payee B for following purpose. 

1. To clear any single debt or liability.

2. To clear multiple liabilities on A (of B).

 3. To clear a single liability even though multiple liabilities are existing. 

4. For Gift. 

5. To disburse a loan. 

6. For security. 

7. For some advance payment. 

8. For some margin money to stock broker. 

9. For some Earnest Money to participate in some commercial activity.

10. For Charity.

This list is not comprehensive, but what it says that a cheque can be issued for many purposes, so the legislature of India has just rigidified the purpose of the cheque that it was acquired by the Holder to clear any debt or liability, or for consideration. If this presumption is not there, then prosecution can never seize the drawer, simply because the drawer can always say that he issued this cheque for Gift or for loan or for charity, not to clear the liability.

But the courts of India, think that this presumption of liability is much more than the purpose, this is beyond the jurisdiction of the courts. The presumption is about truthfulness of facts but once the presumption is not about the existence of facts behind the liability, an accused cannot be asked to rebut, unless prosecution first proves the liability attached by them.

It is against the natural justice and against the well established principle of innocent till proven guilty, to even ask the accused to prove his innocence, so if we interpret that the presumption is with respect to the amount on the cheque, then a considerably heavy onus is present on the accused to disprove it, thus leading to helpless conviction of accused, why helpless, simply because court is bound to draw the presumption, and since accused failed to disprove it, so court is equally helpless but to convict. No one gets convicted for being not able to disprove something, that thing has to be proved first.

Here the well established principle that the prosecution must prove the guilt of accused beyond doubt goes to toss, if we follow the principle that he is an accused who has to prove his innocence.

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